Supermarket chain Morrisons slumped to a £1.5 billion loss during its first full year in private-equity ownership, shows results show.
The grocery retailer was bought by the US private equity firm Clayton, Dubilier & Rice (CD&R) for £7 billion in October 2021 after an intense bidding war.
The results for the period from late July 2021 to the end of October last year reveal the grocer’s struggles during the first year after it was taken private and delisted from the London Stock Exchange.
Morrisons, which employs more than 110,000 staff, including 95,000-plus working in its 500 supermarkets, made an operating loss of £58m before exceptionals for the 65 weeks to 30 October, The Guardian reported citing a trading update from the chain’s parent company filed at Companies House.
A substantial portion of its £1.5bn pre-tax loss for the period was related to finance costs of £593m, which included interest payments on external debt, as well as interest on its lease liabilities and interest payable on loans to group companies.
About £400m of those finance costs is understood to represent the annual interest charge on the company’s debt, as previously outlined by its chief financial officer, Joanna Goff. Morrisons has described this cost as being roughly equal to the amount paid out in annual dividends and interest when the chain was a listed company.
Last September, Morrisons lost its spot among the big four supermarkets when it was overtaken by Aldi, which became the UK’s fourth-largest supermarket chain after Tesco, Sainsbury’s and Asda.
Recently, Morrisons has also bought the struggling convenience store chain McColl’s out of administration, announcing last May it had outbid the owners of Asda in the race to acquire the group.